GOP Sweetens Its Budget Plan With Farm Aid

Senate Republican leaders, possibly paving the way for passage of their controversial budget plan, reportedly agreed Wednesday to include a sweetener for farmers in their package of federal spending cuts.

Sen. Mark Andrews (R-N.D.) said that the deal appears to have stifled the potential opposition of about half a dozen wavering farm-state Republicans to the package. Under a key element, Andrews said, the federal government would try to boost farm exports by giving foreigners who purchase grain from U.S. farmers a bonus of free grain from government-owned stocks. This would reduce the price of American grain, making it more attractive to foreign purchasers.

Tax Hike Plans Killed

While the farm deal was being negotiated off the Senate floor, the Senate formally turned down two Democratic-sponsored plans that would have slashed the deficit by raising taxes. The Republican package includes no tax increase, although Senate Majority Leader Bob Dole (R-Kan.) conceded that a tax increase might be necessary if Congress fails to enact sufficient spending cuts.

Although the tentative deal on agricultural aid boosts the chances of the Republican budget proposal, the outcome of the crucial final vote on the package--which could occur as early as today--remained in doubt. Dole estimated that he has only 48 of the 50 votes he needs.

He suffered a setback Wednes day when California Sen. Pete Wilson, a crucial Republican vote for the package, underwent an emergency appendectomy that could leave him hospitalized for more than a week. With another supporter, Sen. John P. East (R-N.C.), hospitalized for hypothyroidism throughout the budget debate, only 51 Republicans remain against the Senate’s 47 Democrats.

The Republican budget plan, a compromise reached by the White House and Senate Republican leaders, would slash $52 billion from next year’s federal deficit, which is projected at near $230 billion if present spending plans are not changed. Over three years, it aims to achieve $297 billion in spending cuts, leaving a $97-billion deficit in 1988.

‘Adios Farmers Package’

Democrats earlier had suggested that the Republican budget package’s cuts in federal farm support programs offered them their best chance of turning Republican senators against it. Sen. Dale Bumpers (D-Ark.) jokingly called it “the adios farmers package.”

Andrews, who previously had labeled the Republican package a “turkey,” said the export incentives included in Wednesday’s deal made the difference to him. Plummeting sales overseas have been a major force behind the economic crisis facing U.S. farmers.

“It’s amazing how fast I can support a turkey,” Andrews said. “We’ve got a few feathers out of it, and it’s ready for cooking.”

Andrews said that two key Administration officials, Budget Director David A. Stockman and Agriculture Secretary John R. Block, told the Republican senators that they believed they could get Reagan to support the deal.

‘Down to the Last Ditch’

Sen. James Abdnor (R-S.D.), another Republican who had objected to the agricultural cuts in the original budget package, said: “If they do what we’ve talked about, I’m going to go along with it. . . . They were trying to get us down to the last ditch and get as many on board as they can.”

Abdnor said that the new agreement might restore some funds for crop insurance, rural housing and soil conservation.

Democrats, who had expected the defeat of both of their budget proposals, pointed to the fact that each won some Republican support as evidence that they could still splinter the Republican ranks enough to defeat the final GOP package.

The first Democratic plan, by Sens. Lawton Chiles of Florida and Ernest F. Hollings of South Carolina, failed, 35 to 63. Although it received six Republican votes, it lost 18 Democrats, primarily because it included a half-year postponement of the 1986 Social Security benefit increase.

The original GOP budget package included a reduction of approximately two percentage points from the cost-of-living increases for Social Security beneficiaries for each of the next three years. Although the Senate last week rejected that reduction, some cut in Social Security benefits is likely to emerge in the final package presented by Republican leaders.

Byrd Plan Rejected

The second Democratic plan, by Minority Leader Robert C. Byrd of West Virginia, would not have touched Social Security. Although it picked up more support from Democrats, its only Republican vote came from Sen. Charles McC. Mathias Jr. of Maryland, and it failed, 43 to 54.

Mathias argued during Wednesday’s debate that the 1981 tax cut was the main reason for the federal deficit. “The magic of lowering taxes to gain more revenues has not materialized,” he said.

Even Dole refused to rule out a tax increase, recalling that Reagan, in last year’s reelection campaign, labeled a tax hike a “last resort” if spending cuts proved insufficient to close the gap between spending and revenue. Dole said: “I’m not certain we’ve reached that last resort.”